Aso's gift-tax cut for rich
puts wealth gap issue on back burner
By NORIKO
HAMA(This
article, which fist appeared the Japan Times of April 20, 2009,
is reproduced here in Eyes on Japan by kind permission of the
author.)
Who are the people that are suffering the
most as this global depression unfolds? Clearly, it is the weakest members
of society who are getting the worst deal. That, sadly, is the way it has
always worked. There's not much that can be done about this particular
fact of life.
That, however, is all the more reason to make
policymakers concentrate on alleviating the pain being felt by such people
in times like these. But why is it then, that the much-vaunted ¥15
trillion extra economic stimulus package the Japanese government recently
unveiled contains so much stuff favoring the rich?
If you are in the enviable position of being
able to leave a lot of money to your children, you are now eligible for
considerable reductions in the gift tax, provided the gift money will be
spent on buying a house, renovating one, or making it bigger. People who
trade in old environment-polluting cars for more ecologically minded ones
will also get special treatment.
How very nice. But what has all this got to
do with the homeless and the working poor?
Homeless people are homeless because they
cannot buy houses. There is nothing for them to renovate or to enlarge.
They have no car to drive, eco-friendly or otherwise. The argument that
says if the rich get to keep more of their money as a result of tax
breaks, they will spend more of it, thereby contributing to economic
growth, may be true to a certain extent. Prime Minister Taro Aso's rich
friends may decide to buy another house or two as a result of this
measure.
Yet, for that to "trickle down" to
make life more tolerable for the homeless will require a very long,
meandering and precarious process. The relationship between one and the
other is hardly something that justifies the tax policies that this
government seems to be pursuing.
Moreover, one cannot help thinking that the
really rich people for whom the gift-tax reduction will provide a sizable
benefit will probably not care one way or the other. They will buy what
they buy and renew what they want to anyway, tax breaks or no.
If the government is truly committed to
saving the weakest in society, then trickle-down economics is surely not
the way to go.
If Aso wants the rich to make themselves
useful in saving the poor, he should ask them to build shelters for the
homeless, not more new houses for themselves. He should ask them to
provide the working poor with transport, so they can travel to job
interviews that might get them out of the cycle of poverty that so
afflicts them. For the rich to buy yet more cars for themselves will only
mean more congestion, even if the cars themselves are eco-friendly.
It is not that kick-starting economic growth
isn't important. It is. Yet growth per se is not the issue. It will serve
no purpose if we get a good growth figure for a quarter, a year or even
several years, if we cannot effectively deal with the issue of growing
social disparity and the increasingly bleak spots of poverty within this
most affluent of societies. The largest economic stimulus package on
record means nothing if it does not address the relevant issues.
One has more than a sneaking suspicion that
the size of the package came first and the contents were concocted later
to fill in the box. Beware of a government bearing gift-tax cuts as a
gift. It is surely a government that has run out of gift ideas.
© Noriko Hama 2009 All rights reserved
About the author:
NORIKO HAMA is
currently an economist and a professor at the Doshisha University Graduate
School of Business. She
studied international economics at Hitotsubashi University in Tokyo.
Having graduated from the university in 1975, she joined the Mitsubishi
Research Institute where she has addressed a variety of macroeconomic
issues, including the United States economy, European integration and
financial deregulation in Japan.
In
1990 Ms Hama was appointed to the post of the Institute’s first resident
economist and chief representative in London. She returned to Japan in
1998, and served as research director in the Research Center for Policy
and Economy in Mitsubishi Research Institute’s Tokyo headquarters. In
2002, she moved to Doshisha University Business School to take up a
professorship in international economics there.
Ms
Hama writes regularly on current issues in newspapers and economic
journals including the Mainichi Shimbun, Japan Times, Les Echos and the
Financial Times. She is a frequent commentator for the BBC’s World
Service Radio and Television broadcasts, Japan’s NHK Television, CNN and
other current affairs media.
Ms
Hama also serves on a variety of committees advising the major central
government ministries as well as local authorities in Japan.
Publications
include: Can the Dollar Recover? (Nihon-Hyoronsha Japan,
co-authored 1992); Visions for the 21st Century (Adamantine Press UK & Praeger
Publishers USA, contribution, 1992); Disintegrating
Europe (Adamantine Press UK & Praeger Publishers USA, 1996); Pirates
Wearing Neckties (Nikkei Shinbun Japan, 1998); The Economics of
Euroland: new currency, old politics (PHP Books Japan, 2001)); How
the Global Economy Goes Round (Chikuma Shobo Japan, 2001); How Can
the Japanese Economy Recover? (Chikuma Shobo Japan, contribution,
2003); Common Sense and Beyond (Jitsugyo-no-Nihon Sha Japan, 2003);
and The Japanese Economy in Synopsis (contribution, 2005).
This page last updated 2009-12-31
Eyes on Japan compiled and edited by
David Appleyard, 2001-2010 |
Privacy
Policy
|
